Industry looks for safety in numbers

14 May 2004

With the full introduction of chip-and-pin systems just months away, industry spokespeople are explaining the importance of a full changeover.

By the end of this year the majority of credit and debit cards in the UK will contain a small computer chip that will store data to identify the cardholder, and by 2005 most users will enter a four-digit pin rather than signing a receipt it has been predicted.

A similar system has been in place in France since 1993 and has cut card fraud to practically zero.

Marc O'Brien, vice president of Visa UK, says most people will find the process a "no-brainer". He says the switch should be made easier as many "have seen it in France on holiday, or they do it every day at the cash machine".

Talking about the system, Mr O'Brien says: "The business case we're putting forward is on two fronts. One is to make sure consumers are confident in using cards, and the other is to eliminate fraud.

"We have to stay one step ahead of the fraudsters, and the point about chip-and-pin is we can now think about downloading new software to the chips and terminals to keep upgrading them. In the old world of magnetic strips that simply wasn't possible."

The public affairs executive at the Scottish Retail Consortium, Elinor Jayne, believes retailers are fully in favour of the new system even though the initial change-over period will be a bit chaotic: "For smaller retailers, their banks should install the systems for them, so there shouldn't be any cost for them, although this will depend on individual contracts."

But as the chip-and-pin market matures in the UK, the case for binning the old system will become even more pressing.

Ms Jayne points out how important it will be for all retailers! to move forward together: "Once the new system has been introduced, there will come a point when retailers [who do not have chip and pin] are liable for fraud."

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